The opinion of the court was delivered by: TAMM
The plaintiff in this case immigrated to the United States in 1913 from Bulgaria. He was employed in the United States in employment covered by the Social Security Act from December of 1936 until January, 1955. In December of 1955, he filed an application for old age benefits, and he received an award of $ 55.60 per month effective as of November, 1955.
On July 7, 1956, the plaintiff was deported to Bulgaria pursuant to paragraph (1) of Section 241(a) of the Immigration and Nationality Act, 8 U.S.C.A. § 1251(a)(1). On August 31, 1956, the Attorney General of the United States notified the Bureau of Old Age and Survivors Insurance of the Department of Health, Education and Welfare of the fact that the plaintiff had been deported. The Bureau, pursuant to Section 202(n) of the Social Security Act (Title 42 U.S.C.A. § 402(n)),
suspended payment of plaintiff's old age insurance benefits from and after September, 1956. However, it was through inadvertence that the Bureau did pay benefits to the plaintiff for the month of September, 1956.
The plaintiff's wife, Barbara B. Nestor, was given notice of the suspension of payment of old age insurance benefits in November of 1956. In February of 1957, the plaintiff appointed his wife and Irwin Gostin, an attorney, to represent him in his attempts to have the benefit payments reinstated and paid to him in Sofia, Bulgaria.
On January 31, 1958, a decision of a referee of the Department of Health, Education and Welfare was rendered subsequent to a hearing which was held on December 30, 1957, said decision holding that the Bureau properly suspended the payment of benefits to the plaintiff in this case. Following this, on May 5, 1958, plaintiff filed a complaint in this Court for statutory review.
The case is now before this Court on cross-motions for summary judgment, oral argument having been afforded both parties on November 24, 1958.
The sole isue in this case, according to the plaintiff, is the constitutionality of Section 202(n) of the Social Security Act. He contends that this section of the Act, as applied to him, is unconstitutional. In support of this conclusion, his argument sets forth the following contentions:
1. Plaintiff is entitled as a matter of right to Social Security Benefits.
The plaintiff argues that 'throughout the history of the Social Security Act, old age insurance benefits have been referred to as a right of the recipient which he has earned and paid for.' He also places reliance upon the 1949 Report of House Ways and Means Committee, President Eisenhower's message of January 14, 1954 (100 Cong.Rec., 83rd Cong., 2nd Session, p. 257), remarks of Senator Millikin (100 Cong.Rec. p. 14382) and also upon the remarks of Senator George (102 Cong.Rec., p. 15110), all of which, in effect, state that Social Security benefits are not charity or 'a hand-out', but rather are paid to the recipient as an earned right and are related in part to the individual's earnings.
2. Deprivation of Old Age Insurance Benefits is the imposition of a penalty.
The plaintiff reasons that benefit payments are derived from contributions of covered workers, their employers and self-employed persons. The payments that he claims under the Act were, in fact, earned through his work and are assured as a matter of statutory right. However, Congress has adopted an amendment to the Social Security Act which may deprive a person of old age insurance benefits upon conviction of certain crimes and may actually constitute a part of the sentence imposed upon such person. Title 42 U.S.C.A. § 402(u).
In reference to this amendment, the plaintiff's conclusion that such deprivation is a penalty is also based upon letters from the Secretary of Health, Education and Welfare to the Senate Finance Committee on March 28, 1956 (Hearings before the Committee on Finance of U.S. Senate, 84th Cong., 2nd Session (pp. 1318-1319))
and from the Director of the Bureau of the Budget to the Chairman of the Finance Committee (p. 1342).
3. Deprivation of Old Age Benefits in this case violated the Constitution.
The basis for denying to the plaintiff his old age benefits was his deportation which, in turn, was based upon his past membership in the Communist Party. He concedes that deportation based on this activity has withstood constitutional challenge but alleges that the deportation was carried out 'solely on the basis that a deportation is not penal in character and is accordingly not subject to the provisions of the ex post facto and bill of attainder clauses of the Constitution, and for the same reason need not conform with the constitutional requirements governing the imposition of a penalty.' Consequently, he alleges that the same statute and procedure cannot serve as the basis for the imposition of a penalty. He further alleges that Congress recognized this in 1956 when, by the amendment to the Social Security Act, the imposing of such a penalty (i.e., deprivation of old age insurance benefits) was provided for upon conviction of certain crimes upon the principle that the deprivation was part of the judicial process and was imposed only after a judicial trial.
Plaintiff contends that Sec. 202(n) of the Social Security Act is invalid as an ex post facto law and as a bill of attainder. He further contends that the statute is against the due process clause of the Fifth Amendment to the Constitution because deprivation of the benefits has no relation to the aims of the Social Security Act and that since the Act, itself, does not require moral character as a condition to eligibility, there is no reason to discriminate against the group of which the plaintiff is a member.
Finally, the plaintiff states that the suspension of benefits was based upon his deportation and this, in turn, was based upon his participation in certain activities which he alleges were protected by the First Amendment. In other words, the real basis for his deportation and subsequent suspension of social security benefits was because of activities in which he could legally participate.
In his opposition to the plaintiff's motion for summary judgment and in support of his cross motion for summary judgment, the defendant alleges that the plaintiff did not have a vested right to receive social security benefits; that suspension of benefits under 202(n) of the Social Security Act is not the imposition of criminal punishment; that the aforesaid section of the Act is constitutional as applied to the plaintiff; and that the findings of fact by the Secretary are supported by substantial evidence and are conclusive.
Counsel for the defendant has emphasized the importance of considering the purpose of the Social Security Act. Although counsel for the plaintiff puts little, if any, emphasis on this, it would be well to briefly inquire into the purpose of this legislation.
The Social Security Act of 1935 'provided a system of old-age insurance for persons working in industry and commerce as a long-run safeguard against the occurrence of old-age dependency.' U.S.Code, Cong.Service, Vol. 2, 81st Cong., 2nd Sess., 1950, p. 3289. Subsequent revisions and amendments through 1946 dealt generally with provisions for broader coverage, supplementary benefits for dependents of the primary beneficiary and determining contribution rates.
Congress, under authority granted to it by the Federal Constitution (Article I, Sec. 8), saw fit to enact this legislation for the general welfare. Mr. Justice Cardoza, in the case of Helvering v. Davis, 301 U.S. 619, 672, 57 S. Ct. 904, 909, 81 L. Ed. 1307, 109 A.L.R. 1319, 1324, wrote the following in discussing the Social Security Act:
'But the ill is all one or at least not greatly different whether men are thrown out of work because there is no longer work to do or because the disabilities of age make them incapable of doing it. Rescue becomes necessary irrespective of the cause. The hope behind this statute is to save men and women from the rigors of the poorhouse as well as from the haunting fear that such a lot awaits them when journey's end is near.'
See also: Ewing v. Black, 6 Cir., 172 F.2d 331, 335, 6 A.L.R.2d 948; Ray v. Social Security Board, D.C., 73 F.Supp. 58, 62.
Insofar as the purpose of the Act may be relevant, it arises in this manner, according to the Government:
'A condition for the payment of benefits which takes into consideration whether or not the claimant is within or outside the United States is clearly reasonably related to the purpose of the program. The function which Title II of the Social Security Act was designed to serve was to minimize the great and rapidly growing cost of providing for needy aged persons in the United States * * * Certainly it would be pertinent to this purpose to consider, in establishing conditions prerequisite to eligibility for benefits, the physical presence or absence of a potential claimant within the United States. A fortiori, it is pertinent and reasonable to ...